Minister for Public Expenditure and Reform Brendan Howlin has said the housing supply should be "dramatically increased" to tackle the homelessness crisis and provide private homes for sale.

Mr Howlin said it was ironic that an accommodation shortage existed so soon after a house building boom.

“Homelessness is the number one priority of the new Minister for the Environment,” Mr Howlin said.

He said the new Environment Minister Alan Kelly would continue the "sterling work" done by former super junior minister Jan O'Sullivan, who had provided 2,000 additional houses this year.

"The Tánaiste [JOAN BURTON]indicated that in appointing a Labour Minister for the Environment that housing would be the number one priority for that Department," he said.

“There is a certain irony that after a housing boom, when we were building more houses than Britain just a few short years ago, that we’ve a housing shortage now. And we need to fix that.

“It is a supply side issue. We need to work on a variety of platforms to ensure that the supply of houses is dramatically increased to deal with the issue of social housing and housing in the commercial sector.”

He was speaking on his way into this morning’s Cabinet meeting. Mr Howlin’s Cabinet colleague, Minister for the Environment Alan Kelly told The Irish Times this morning that he had ruled out introducing rent controls for now as a response to rapidly increasing sale and rental prices of properties in Dublin and other large urban areas.

As concerns are expressed about the possibility of a property price spiral, Mr Kelly said the best way of responding to it was to increase the availability of social and private housing stock. The price of property and rents in some areas have risen sharply since 2011, with an acceleration this year.

Meanwhile, a report detailed in this newspaper this morning cites a deepening pessimism about ending long-term homelessness by 2016. The report to Ms O'Sullivan was written on July 4th by the Homelessness Oversight Group, and states that it is becoming increasingly politically difficult to meet the target as other households compete for scarce housing resources.

It says data on homelessness “indicates that significant progress has not been made toward the 2016 goals” and urges relevant bodies to implement politically sensitive plans “urgently”.